Other Financial Data | 3 Months Ended |
Mar. 29, 2014 |
Other Financial Data [Abstract] | ' |
Other Financial Data | ' |
Other Financial Data |
Statement of Operations Information |
Other Charges |
Other charges included in Operating earnings consist of the following: |
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| Three Months Ended | | | | | | | | | | | | |
| March 29, | | March 30, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Other charges (income): | | | | | | | | | | | | | | | |
Intangibles amortization | $ | 5 | | | $ | 6 | | | | | | | | | | | | | |
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Reorganization of businesses | 21 | | | 11 | | | | | | | | | | | | | |
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Gain on sale of building and land | (21 | ) | | — | | | | | | | | | | | | | |
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| $ | 5 | | | $ | 17 | | | | | | | | | | | | | |
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During the three months ended March 29, 2014, the Company completed the sale of a building and parcel of land with a net book value of $3 million for net cash proceeds of $24 million resulting in a gain on sale of $21 million. |
Other Income (Expense) |
Interest expense, net, and Other, both included in Other income (expense), consist of the following: |
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| Three Months Ended | | | | | | | | | | | | |
| March 29, | | March 30, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Interest income (expense), net: | | | | | | | | | | | | | | | |
Interest expense | $ | (30 | ) | | $ | (30 | ) | | | | | | | | | | | | |
Interest income | 5 | | | 5 | | | | | | | | | | | | | |
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| $ | (25 | ) | | $ | (25 | ) | | | | | | | | | | | | |
Other: | | | | | | | | | | | | | | | |
Foreign currency gain (loss) | $ | (2 | ) | | $ | 4 | | | | | | | | | | | | | |
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Other | 1 | | | 3 | | | | | | | | | | | | | |
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| $ | (1 | ) | | $ | 7 | | | | | | | | | | | | | |
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Earnings Per Common Share |
The computation of basic and diluted earnings per common share is as follows: |
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| Net Earnings | | | | | | | | | | | | |
Three Months Ended | March 29, | | March 30, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Basic earnings per common share: | | | | | | | | | | | | | | | |
Earnings | $ | 127 | | | $ | 192 | | | | | | | | | | | | | |
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Weighted average common shares outstanding | 254.1 | | | 274.5 | | | | | | | | | | | | | |
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Per share amount | $ | 0.5 | | | $ | 0.7 | | | | | | | | | | | | | |
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Diluted earnings per common share: | | | | | | | | | | | | | | | |
Earnings | $ | 127 | | | $ | 192 | | | | | | | | | | | | | |
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Weighted average common shares outstanding | 254.1 | | | 274.5 | | | | | | | | | | | | | |
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Add effect of dilutive securities: | | | | | | | | | | | | | | | |
Share-based awards | 4.2 | | | 6.2 | | | | | | | | | | | | | |
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Diluted weighted average common shares outstanding | 258.3 | | | 280.7 | | | | | | | | | | | | | |
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Per share amount | $ | 0.49 | | | $ | 0.68 | | | | | | | | | | | | | |
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In the computation of diluted earnings per common share for the three months ended March 29, 2014 and March 30, 2013, the assumed exercise of 5.0 million and 4.5 million stock options, respectively, were excluded because their inclusion would have been antidilutive. |
Balance Sheet Information |
Cash and Cash Equivalents |
The Company’s cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) were $3.1 billion at March 29, 2014 and $3.2 billion at December 31, 2013. Of these amounts, $64 million at March 29, 2014 and $63 million at December 31, 2013 were restricted. |
Investments |
Investments consist of the following: |
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March 29, 2014 | 29-Mar-14 | | 31-Dec-13 | | | | | | | | | | | | |
Available-for-sale securities: | | | | | | | | | | | | | | | |
Government, agency, and government-sponsored enterprise obligations | $ | 15 | | | $ | 15 | | | | | | | | | | | | | |
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Corporate bonds | 8 | | | 7 | | | | | | | | | | | | | |
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Mutual funds | 11 | | | 11 | | | | | | | | | | | | | |
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Common stock and equivalents | — | | | 2 | | | | | | | | | | | | | |
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| 34 | | | 35 | | | | | | | | | | | | | |
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Other investments, at cost | 211 | | | 201 | | | | | | | | | | | | | |
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Equity method investments | 15 | | | 15 | | | | | | | | | | | | | |
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| $ | 260 | | | $ | 251 | | | | | | | | | | | | | |
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The Company had no unrealized gains or losses on its investments as of both March 29, 2014 and December 31, 2013. |
Accounts Receivable, Net |
Accounts receivable, net, consists of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Accounts receivable | $ | 1,788 | | | $ | 1,976 | | | | | | | | | | | | | |
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Less allowance for doubtful accounts | (61 | ) | | (56 | ) | | | | | | | | | | | | |
| $ | 1,727 | | | $ | 1,920 | | | | | | | | | | | | | |
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Inventories, Net |
Inventories, net, consist of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Finished goods | $ | 257 | | | $ | 232 | | | | | | | | | | | | | |
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Work-in-process and production materials | 508 | | | 468 | | | | | | | | | | | | | |
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| 765 | | | 700 | | | | | | | | | | | | | |
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Less inventory reserves | (189 | ) | | (178 | ) | | | | | | | | | | | | |
| $ | 576 | | | $ | 522 | | | | | | | | | | | | | |
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Other Current Assets |
Other current assets consist of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Costs and earnings in excess of billings | $ | 392 | | | $ | 390 | | | | | | | | | | | | | |
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Contract-related deferred costs | 114 | | | 105 | | | | | | | | | | | | | |
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Tax-related deposits and refunds receivable | 71 | | | 113 | | | | | | | | | | | | | |
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Other | 136 | | | 161 | | | | | | | | | | | | | |
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| $ | 713 | | | $ | 769 | | | | | | | | | | | | | |
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Property, Plant and Equipment, Net |
Property, plant and equipment, net, consists of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Land | $ | 36 | | | $ | 36 | | | | | | | | | | | | | |
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Building | 651 | | | 649 | | | | | | | | | | | | | |
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Machinery and equipment | 1,979 | | | 1,938 | | | | | | | | | | | | | |
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| 2,666 | | | 2,623 | | | | | | | | | | | | | |
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Less accumulated depreciation | (1,871 | ) | | (1,813 | ) | | | | | | | | | | | | |
| $ | 795 | | | $ | 810 | | | | | | | | | | | | | |
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During the first quarter of 2014, the Company entered into an arrangement to transfer its Reynosa, Mexico manufacturing operation including the land, building, equipment, inventory, and employees to a contract manufacturer. The transaction closed subsequent to the quarter ended March 29, 2014. As a result of the expected sales proceeds, the Company recognized an impairment loss of $6 million during the quarter ended March 29, 2014, within Other charges in its condensed consolidated statements of operations. |
Depreciation expense for the three months ended March 29, 2014 and March 30, 2013 was $50 million and $45 million, respectively. |
Other Assets |
Other assets consist of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Intangible assets, net | $ | 103 | | | $ | 87 | | | | | | | | | | | | | |
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Long-term receivables | 47 | | | 6 | | | | | | | | | | | | | |
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Other | 94 | | | 92 | | | | | | | | | | | | | |
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| $ | 244 | | | $ | 185 | | | | | | | | | | | | | |
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Accrued Liabilities |
Accrued liabilities consist of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Deferred revenue | $ | 810 | | | $ | 778 | | | | | | | | | | | | | |
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Compensation | 276 | | | 334 | | | | | | | | | | | | | |
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Billings in excess of costs and earnings | 354 | | | 295 | | | | | | | | | | | | | |
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Tax liabilities | 92 | | | 95 | | | | | | | | | | | | | |
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Customer reserves | 107 | | | 146 | | | | | | | | | | | | | |
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Dividend payable | 79 | | | 79 | | | | | | | | | | | | | |
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Other | 649 | | | 675 | | | | | | | | | | | | | |
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| $ | 2,367 | | | $ | 2,402 | | | | | | | | | | | | | |
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Other Liabilities |
Other liabilities consist of the following: |
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| March 29, | | December 31, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | |
Defined benefit plans, including split dollar life insurance arrangements | $ | 1,714 | | | $ | 1,759 | | | | | | | | | | | | | |
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Postretirement health care benefit plan | 118 | | | 117 | | | | | | | | | | | | | |
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Deferred revenue | 293 | | | 302 | | | | | | | | | | | | | |
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Unrecognized tax benefits | 61 | | | 102 | | | | | | | | | | | | | |
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Other | 194 | | | 205 | | | | | | | | | | | | | |
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| $ | 2,380 | | | $ | 2,485 | | | | | | | | | | | | | |
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Stockholders’ Equity |
Share Repurchase Program: The Company paid an aggregate of $57 million during the first quarter of 2014, including transaction costs, to repurchase approximately one million shares at an average price of $66.32 per share. As of March 29, 2014, the Company had used approximately $5.3 billion of the share repurchase authority, including transaction costs, to repurchase shares, leaving $1.7 billion of authority available for future repurchases. |
Payment of Dividends: During the three months ended March 29, 2014 and March 30, 2013, the Company paid $79 million and $72 million, respectively, in cash dividends to holders of its common stock. |
Accumulated Other Comprehensive Loss |
The following table displays the changes in Accumulated other comprehensive loss, net of tax, by component from January 1, 2014 to March 29, 2014: |
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| Gains and Losses on Cash Flow Hedges | | Unrealized Gains and Losses on Available-for-Sale Securities | | Retirement Benefit Items | | Foreign Currency Translation Adjustments | | Total |
Balance as of January 1, 2014 | $ | (1 | ) | | $ | (2 | ) | | $ | (2,188 | ) | | $ | (96 | ) | | $ | (2,287 | ) |
Other comprehensive income before reclassifications | — | | | 2 | | | — | | | 2 | | | 4 | |
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Amounts reclassified from accumulated other comprehensive loss | $ | — | | | $ | — | | | $ | 13 | | | $ | — | | | $ | 13 | |
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Current period change in Other comprehensive income (loss) | — | | | 2 | | | 13 | | | 2 | | | 17 | |
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Balance as of March 29, 2014 | $ | (1 | ) | | $ | — | | | $ | (2,175 | ) | | $ | (94 | ) | | $ | (2,270 | ) |
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The following table displays the amounts reclassified from Accumulated other comprehensive loss and the affected line item in the condensed consolidated statement of operations during the three months ended March 29, 2014 and March 30, 2013: |
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| Three Months Ended | | | | | | | | | | | | |
| March 29, | | March 30, | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | |
Gains on cash flow hedges: | | | | | | | | | | | | | | | |
Foreign exchange contracts | $ | | | | $ | (1 | ) | | Cost of sales | | | | | | | | | | |
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| — | | | (1 | ) | | Total before tax | | | | | | | | | | |
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| $ | — | | | $ | — | | | Tax (expense) or benefit | | | | | | | | | | |
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| $ | — | | | $ | (1 | ) | | Net of tax | | | | | | | | | | |
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Amortization of Retirement Benefit Items: | | | | | | | | | | | | | | | |
Prior-service costs | $ | (10 | ) | | $ | (11 | ) | | Selling, general, and administrative expenses | | | | | | | | | | |
Actuarial net losses | 29 | | | 39 | | | Selling, general, and administrative expenses | | | | | | | | | | |
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| 19 | | | 28 | | | Total before tax | | | | | | | | | | |
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| (6 | ) | | (9 | ) | | Tax benefit | | | | | | | | | | |
| $ | 13 | | | $ | 19 | | | Net of tax | | | | | | | | | | |
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Total reclassifications for the period, net of tax | $ | 13 | | | $ | 18 | | | | | | | | | | | | | |
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